German Parliament Passes Law on Disclosure of Country-by-Country Income Tax Information LEGAL INSIGHTS GERMANY

Morgan Lewis

Morgan Lewis

The German Parliament passed the law implementing Directive (EU) 2021/2101 with regard to the disclosure of income tax information by certain companies and branches (so-called public country-by-country reporting) on May 11, 2023. The rules will apply to multinational and high turnover (turnover threshold at €750 million) companies—both unrelated and related companies—as well as domestic branches of unrelated and related companies established outside the European Union. Exceptions exist for CRR credit institutions and large securities institutions if they publish a country-by-country report in accordance with the relevant regulatory requirements.

The reporting requirement includes, among other things, information on business activity, profit and loss, number of employees, and income taxes paid, broken down by EU states, European Economic Area (EEA) states, and so-called noncooperative countries and territories for tax purposes. The reporting obligation may be deferred for four years if the disclosure of certain information would cause a material disadvantage to the company's market position.

The regulations are implemented by supplementing the Fourth Section of the Third Book of the German Commercial Code with a new Fourth Subsection (§§ 342ff HGB). The new disclosure requirement under the Accounting Directive is in addition to the requirement for country-by-country reporting for tax purposes pursuant to Section 138a of the German Fiscal Code.


As a result of amendments to the German Stock Corporation Act and the SE Implementation Act, the company’s supervisory board or other supervisory or administrative body will in the future also be required to monitor this income tax information report.

In addition, the law provides for further amendments to the German Commercial Code.


The law enters into force on the day after promulgation.

The requirements for income tax information reporting will apply for fiscal years beginning after June 21, 2024.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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